Canopy receives another credit check buyers remorse !
3 Nasdaq Stocks That Could Be Heading Six-Feet Under
Canopy Growth (CGC)
Source: Jarretera / Shutterstock.com
As my colleague Joel Baglole wrote recently, Canopy Growth(NASDAQ:CGC) has been posting significant losses. Its stock price has been dramatically declining over the past years. Ongoing financial struggles and shrinking market share make its future uncertain.
Looking ahead, analysts have a conservative outlook on CGC’s stock, with current price targets suggesting a potential downside. The consensus price target is around $4.87, indicating a 38% decrease from the current levels.
However, I think that things are worse than they appear for CGC.
CGC recorded nearly a billion dollars in losses over the last 12 months. It only has $140 million of cash on its balance sheet. Furthermore, it already has nearly half a billion dollars of debt, too. The debt stands at $446 million, a huge sum for a company whose EPS has consistently been negative.
CGC has also undergone a massive shareholder dilution, with shares outstanding growing 70.58% year-over-year.
I think that even if CGC is somehow able to remain solvent, this dilution will continue at the expense or shareholders. At the minimumm its financial risk profile will increase, which then makes it one of those Nasdaq stocks to sell.